Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce
Issue No. 11 - Evidence - December 7, 2016
OTTAWA, Wednesday, December 7, 2016
The Standing Senate Committee on Banking, Trade and Commerce met this day at
4:20 p.m. to study and report on the development of a national corridor in
Canada as a means of enhancing and facilitating commerce and internal trade.
Senator David Tkachuk (Chair) in the chair.
The Chair: Welcome to the Standing Senate Committee on Banking, Trade
and Commerce. My name is David Tkachuk, and I am the chair of this committee.
Today is our ninth meeting on the subject of our study on the development of a
national corridor in Canada as a means of enhancing and facilitating commerce
and internal trade.
I would like to take this opportunity to inform honourable members that
yesterday the committee's motion to extend our reporting date on this study was
extended from February 28, 2017 to May 31, 2017.
During the first part of our meeting today, it gives me great pleasure to
welcome our former colleague, the Honourable Gerry St. Germain, P.C., who served
in the Senate from 1993 to 2012 for British Columbia Langley—Pemberton—Whistler.
During his time in the Senate, Senator St. Germain served as member of this
committee, among others, including being Chair of the Standing Senate Committee
on Aboriginal Peoples during a number of parliaments.
Prior to his time in the Senate, Mr. St. Germain previously served as a
member of Parliament from 1983 to 1988.
In March 1988, Mr. St. Germain joined the Canadian cabinet, the first Metis
to do so, as Minister of Transport Canada and was later appointed as Minister of
Thank you for being with us today, Honourable Senator St. Germain. Please
proceed with your opening remarks, after which we will go to a question and
Hon. Gerry St. Germain, P.C., former senator, as an individual: Thank
you, Mr. Chair. What an honour to be here with my good colleagues that I
respected, worked with and I miss all of you. I want to be honest about it. You
guys were great.
I look at Lynn, the clerk, those that translate and those that work for us,
all you great ladies in the back and the interpreters, thank you for just being
who you are and what you did for me when I was here.
Good afternoon, honourable senators. As I have been introduced, I am Gerry
St. Germain, a former senator from British Columbia, cattle rancher and
businessman, but more famously known as a chicken farmer. And I'm also an
Aboriginal person, a Metis son of Manitoba. I want to begin by thanking the
members of the committee for the opportunity to appear here before you.
As some of you will know, I served 19 years in this place, as the chairman so
adeptly pointed out, 16 years as a member of the Standing Senate Committee on
Aboriginal Peoples, with seven of those in the chair.
Since retiring from the Senate of Canada at the end of 2012, I have been
volunteering my time to assist First Nations in northern British Columbia on
options that could facilitate their equity ownership in major projects that are
proposed for their territories, which, by the way, if done properly is a good
I will focus my remarks today concerning the implications that the
establishment of a national corridor may have on some of the business interests
of First Nations, based on my volunteer work in this area. The issues facing
First Nations in dealing with major project development are complex and require
a significant level of capacity and attention to resolve.
I think if we have learned anything from the last 20 years of landmark court
decisions and the recent announcements by the Government of Canada on the
approval of Kinder Morgan, Line 3, Pacific Northwest LNG and the rejection of
Northern Gateway is that our current policy approach to major project
development is not serving the interests of First Nations or the rest of Canada
particularly well at this time.
Despite these cabinet approvals, there remains a lack of certainty that these
projects will proceed. This lack of certainty is bad for industry, bad for First
Nations and bad for the economic future of Canada. If we continue with the same
approach, we will continue to get the same results.
The current policy mandate of central agencies, in my opinion, does not
support the meaningful inclusion of the social and economic interests held by
First Nations into the framework around the development of major projects.
So let me take this opportunity to be clear when I say that I do not view
anything in the First Nations arena through a partisan lens or prism. I feel
that it's got to be totally non-partisan.
It's clear to me that attempts by successive governments over multiple
decades, including governments I was part of, to change Canada's policy
approaches may have been well intentioned but have failed for a variety of
Today, I see an increasing urgency to get things right and advance the
process as we are running out of second chances to get things right. This
urgency, in my opinion, transcends all partisan lines. Policymakers and
legislators must work together and must act on the interests held by First
Nations, and in doing so we must be willing to act in ways that enable the
interests held by First Nations to become part of the solution.
New approaches must be focused on the goal of getting First Nations into
business so they can be a participant in the economic mainstream of Canada and
enjoy the societal benefits of meaningful economic participation. The current
environment does not allow for this to happen and I believe it must change, the
sooner the better.
I believe the current government, the present government here in Ottawa, has
been saying the right things and setting the right tones for the generational
change that needs to happen; but, my friends, the rubber needs to start hitting
the road. We have got to get the show on the road.
Canada has at its disposal existing legislative tools that can be leveraged
in order to begin the inclusion of First Nations interests in the policy
framework around the development of major projects. One such tool is the First
Nations Fiscal Management Act that has broad-ranging purposes to assist with
financial management practices and to assist with the strengthening of business
relationships between other governments, banks and industry. Honourable
senators, the utilization of the purposes of this act should become a
These services provided by this optional legislation through the three First
Nations-led institutions it created are now being utilized by about 200 First
My volunteer efforts to assist First Nations in northern B.C. have been in
tandem with the efforts of the First Nations Financial Management Board and the
organization's executive chair, Harold Calla, who is sitting in the gallery here
right behind me. He has appeared before you before. His sincerity, his
commitment and his dedication are without question.
These efforts, at the request of a number of First Nations communities, have
focused on options that would provide the access to capital required to take an
ownership position through equity in proposed major projects. These communities
have stated their interest in pursuing ownership in major projects and have
established a capacity building tool in order to gain access to the technical
information required to make informed business decisions. This capacity building
tool is known as the First Nations Major Projects Coalition, which includes the
participation of First Nations from the northwest coast to the northeast of B.C.
I understand, as I said earlier, that this committee had the opportunity to hear
from the First Nations members of the coalition at the end of October concerning
the nature of their work, so I won't get into their details. I saw a playback of
the tape, and I was impressed. I'm impressed working with these people. They are
great people. Chief Joe Bevan was here as well as Chief Corrina Leween from
Cheslatta, and Angel Ransom from the Carrier Sekani nations, just tremendous
workers. The coalition represents an important step forward in how the next set
of policy options are arrived at in Canada. The input and direction on a new
policy framework must come from the First Nations, I believe.
Government cannot continue to rely on its own internal policy processes and
expect innovative and different approaches to be produced. There must be a place
for outside thought from First Nations who are directly impacted to influence
policy decisions moving forward. The coalition represents a non-political,
business-focused body with the ability to make this kind of contribution. Canada
must be prepared to make continued investments in capacity building processes
like the coalition if First Nations, governments and industry are to arrive at a
better place on these issues.
At the same time, we must be prepared to embrace concepts like equity
ownership in major projects as the likely outcome of increased investments in
capacity. Ownership in proposed major projects is an important consideration on
a number of fronts.
It has been my experience from travelling all over the north of B.C. and
other parts of Canada for the past four years, talking to hereditary and elected
leaders, elders, youth and the rank and file First Nations members in these
communities, that the environment is their first priority. This I can't stress
enough. I always thought it was just money and business. It's not.
I sat down with the elders. I sat in a room, and for about 20 minutes nobody
spoke. I had my Metis vest on. One of them eventually came up and asked me about
the vest, and it broke the ice, and then we got into what we wanted to talk
about. They told me right off the bat that the number one thing is the
environment. They told me the sad things about the social problems they have
with youth, lack of respect, everything; but the environment was number one, as
far as they were concerned.
First Nations want to approach the protection of the environment from a
position of influence, and rightly so, I believe. I've seen firsthand what
inadequate land use planning policy has done to First Nations traditional
territory in northeastern B.C. where most of the LNG extraction takes place.
That's in the northeast, by the way.
It is circumstances like these that have shaken First Nations' trust in
existing Crown processes around major project development. It is through
ownership in proposed major projects that First Nations stand to gain the most
benefit in influencing the management decisions of a project and mitigating risk
to the environment.
Senators, let me tell you, I flew for an hour and 40 minutes in a helicopter
over what was once the most productive game area in the world. We were flying at
500 feet above the ground. We never saw a single moose. The only thing you could
see was wolves — totally destroyed. This is the northeast. This is out of Fort
Nelson. You see brown water left at these fracking sites. There's no brown water
in the north, unless it's made by man.
Ownership through an equity interest would also provide the kind of revenue
stream that First Nations communities need in order to establish economies
robust enough to move away from the programs and services dependency on the
Department of Indigenous and Northern Affairs. First Nations have negotiated
equity stakes with industry on past projects such as the Pacific Trail Pipeline,
the PTP. This project set the benchmark by offering First Nations a true and
meaningful seat at the board table. The equity scenario in this project did not
get off the ground because First Nations could not achieve the financing
required and were either told that it was not possible or that the interest on
the loan would be equal to the rate of return on investment.
Honourable senators, this example underscores the need for governments to be
willing to work with First Nations to find innovative ways in which barriers to
accessing capital can be removed on a scale large enough to facilitate their
equity investment in major projects.
To do this, we should look at the way in which Canada's balance sheet and
credit rating may be leveraged to assist through the provision of government
The issue of equity investment by First Nations in major projects is not
without its detractors. Some will say that equity brings too much risk to the
equation for First Nations and that revenue sharing or deals focused on cash
payouts are the answer to accommodate First Nations' interests. In my opinion,
these alternative options do not provide First Nations with the opportunity to
influence and represent their interests within the project life cycle.
And if we are to move beyond the status quo, First Nations must have options
available to them that allow for this type of binding influence to be asserted
and for them to possess the capacity to see it through. Major players within the
gas and pipeline industry have told me directly the safest investment they can
make with their money is in their projects, and they're right.
Any risk associated with equity purchases can be mitigated in a variety of
ways. I can speak to this because I have lived in the world of business
personally. I serve on a board of directors of a First Nations-owned company in
Alberta. I know the type of decisions we make as a board, why we make them and
what benefits it brings to that First Nation.
What happens if we aren't prepared to embrace these changes that are needed
to enable a majority of First Nations to participate at this level in major
projects? I ask you that question. Are we going to be able to create a policy
environment where projects like a national corridor to facilitate trade and
commerce can be built? That's another good question. The third question I have
is: What do we want the economy and the social fabric of Canada to look like in
10 or 20 years?
It was 10 years ago during my time as Chair of the Standing Senate Committee
on Aboriginal Peoples that the committee produced a comprehensive report focused
on economic development. That report made a series of recommendations covering
off many of the realities and challenges that I have spoken of today. A lot of
contributions to that committee work were made by senators like Senator Dyck,
Senator Sibbeston, Senator Patterson, Senator Campbell, who is here with us
today, and others in this place who have believed and continue to believe in the
future of our First Nations people.
While there have been incremental changes during this time, there has not
been a willingness to create the kind of change necessary to get First Nations
to the places they are asking to be and should be. These places are in the
boardrooms making decisions, in the community building robust economies and
social services, and out on the land protecting the environment.
Honourable senators, at 79 years old, going on 80, I will continue to
volunteer my time to assist First Nations in B.C. and anywhere else in Canada in
their efforts to achieve the capacity and tools required to make informed
business decisions and to benefit fully from those positions. So long as the
good Lord lets me continue, I will do that. But we must get to a point where the
page can be turned on the historical impacts and general plight facing our First
One such way to do this is to empower First Nations with control over their
own futures by enabling them to assume their place in the economic mainstream of
Canada. Our economic future as a natural resource dependent country depends on
I'm going to finish off by telling you a short story of when this young Metis
ended up in British Columbia in 1966 with no money, three little kids and no
furniture. I had to rent something, so I rented this wreck of a house from a
German immigrant and a Dutch immigrant. We established a relationship, and the
German gentleman said to me, "Frenchman, you got to have a house.'' And I had no
capital. I had no access to capital. I am just an ordinary Metis and my wife is
from an absolutely poor family.
The German credit union, Edelweiss Credit Union in Vancouver, gave me a 100
per cent loan and mortgage to build a house within six years. This was the
mid-1970s. I was worth $360,000 because somebody gave me the chance, the
opportunity to take an equity position in the economy of this country.
This is all our First Nations need, a break, and we haven't given it to them.
We keep throwing money, programs, projects, everything, but it doesn't work, so
we have to make a change.
I see people here that I've worked with for years. I see some new faces,
which is good. Remember, folks, it's in your hands, an awful lot of it. Do the
right thing, please.
God bless all of you. Thank you.
The Chair: Thanks, Senator St. Germain.
I want to follow up because we had a great presentation from the First
Nations group in British Columbia. We all thought, and I believe I speak on
behalf of all members, that it was very informative.
When we talk about negotiating with First Nations on major projects, what's
been missing in this whole thing is that we need a partnership with First
Nations. What has been problematic is that we don't recognize them as equal
partners in a lot of these projects. That's a lesson for the corporate community
as well, where they're not seen as equal players. I just want you to comment on
Second, how do you see the federal government guaranteeing equity or
financial assistance? Would it be like municipalities receive? I know
municipalities receive guarantees that lower their interest rates. All the
cities receive guarantees, as Senator Campbell would know. I know in
Saskatchewan that the government underwrites loans for all the cities in the
province. Is that the way you see it?
Mr. St. Germain: In essence, but I'd want them to be good investments.
Pacific Trails Pipeline comes along. They are good investments. The return on
those investments is guaranteed because there's a set rate. They're under the
public utilities commission.
There's no question that we have to devise something at this level to deal
with these people so they can get into it. But they're cognizant. It took me
four years to get their trust and respect so I could sit down and have an honest
chat with them.
They've told me that they realize they're short on capacity. They need help
in that area. They'd like to manage their own things. That's why they want to go
The biggest hurdle will be, as I mentioned in my delivery, some of these
major pipeline corporations don't want to give it up. I said to them, "Do you
mean to say that you're prepared to go on their traditional lands with your
pipeline, but yet you're not prepared to share an equity position with them?''
They said, "No, we don't want to. It's the best investment we can make, and we
want to keep it for ourselves.'' I said, "What if they don't let you go
through?'' This is one of the lead guys of one of the bigger pipeline companies.
I don't want to mention it here.
He told me straight up — Mr. Calla, who is behind me, was with me — "Oh,
we're not interested.'' I said, "How will you go through?'' "We'll just go
through; we always have.'' I said, "Don't try to come through my ranch, because
if you try to come through my ranch and just bulldoze your way through, there
will be trouble.''
These guys actually think that they've got a God-given right to go wherever
they want, which they've done historically. Look at the poor people on Dollarton
Highway. Senator Campbell knows about this. They were told to move their shacks
off the area because they were coming through with the highway, and that's what
they did. They went right through the reserve.
There are still people who think like this. That's the other thing. We have
to get industry on side so that they realize the responsibility.
An example of a guy that's done it as correctly as possible is Ian Anderson,
from Kinder Morgan. As the head honcho of that pipeline company, he goes right
down and speaks to the Natives.
I'm not taking a position on Kinder Morgan or on Mr. Anderson, but I know he
does that, and it makes a significant difference. He goes and deals with the
people face to face, shakes hands with them and tries to make a deal with them.
That's what we've got to start doing. We've got to start recognizing these
people as capable.
The three people you had here, Angel Ransom, a young Native girl, brighter
than bright; Corrina, the Chief of Cheslatta, very bright and capable of doing
business; and Joe Bevan, I think, was the third one, another guy that recognizes
we have to build capacity, and this is the only way we're going to do it.
Senator Ringuette: First things first: Gerry, we also miss you a lot.
You were quite an inspiration.
The issue of the northern corridor and what we're looking at right now,
hopefully, at the end of our study, will be to make a recommendation to fund the
study, per se. That will be done at a university level.
From the get-go, as you indicated, you're talking about mostly
equity-building, knowledge-building and all that. I think that this committee
should insist that First Nations be involved from the get-go, at the start of
I'd like to know, from your experience in regard to this kind of major
project, what would be your recommendation in regard to who should be the First
Nation participant in step one, which is the study?
Mr. St. Germain: Senator, that's why I'm here. There are other things
I could be doing, like getting bucked off my horse like I did five weeks ago.
That was not fun. There are other things I could be doing, but I want to be
The Chair: Is this as bad?
Mr. St. Germain: I was lying on the ground. There was a Jehovah's
Witness praying over me. It was funny.
What excites me about this is amalgamation of the First Nations. I'm not the
first on this. Premier Gordon Campbell, in British Columbia, suggested this
before he left office, amalgamating the First Nations together. Industry now
goes and picks them off one at a time, governments do this, and it's not the
right way of doing things.
This is what the First Nations Major Projects Coalition does. They are
coalescing, amalgamating as a unit. They have a steering committee, and the
members that were here were the members of the steering committee.
It's organizations like that that you should be talking to, and you have, and
I compliment you on that. That's why I'm so excited about what you're studying
By virtue of amalgamation, you get the majority. Out of about 38 bands, 25
have passed band council resolutions, where their membership is in favour of
what they're doing. It's through amalgamation.
I think you're right, because most of this corridor will be going through
traditional lands. Mr. Chairman, and all of you, I suggest strongly that you
keep the First Nations involved and then there will be no surprises. You will be
surprised at the quality of people out there. I have run into some real
Harold Calla and I have worked together for 30 years. He was working on
various other pieces of legislation that were allowing First Nations to opt out
of the Indian Act, which is a good idea as well, because unfortunately, the
Indian Act is so paternalistic that it doesn't let our First Nations think for
Senator Ringuette, I would say the amalgamation process, but keep First
Nations involved. I think I mentioned in my delivery that it's critical.
As I say, we've got the ball starting to roll. B.C. has a lot of First
Nations bands. They have over 260 of them out of about 630. These are
We've got to start someplace. Every giant journey begins with a single step.
Our step on the First Nations Major Projects Coalition is a small step, but it's
an important one. You're at the stage in your study where you can keep First
Senator Tkachuk and all of us from the West, we know that this corridor, if
it goes through, I'd say a huge percentage of it will be on Aboriginal lands.
Senator Black: Thank you for your contribution to this place and your
ongoing work with this very important project.
Senator, you would likely not be aware, but just today the Transport
Committee tabled a report that provides in one of its recommendations — and we
only had I think eight recommendations in it — something that I know will please
you. We have recommended that government, businesses and First Nations convene
annually to review best practices to ensure that First Nations' engagement in
pipeline projects is effective. This was tabled four hours ago. There's a clear
recognition among that committee that best practices need to be employed to meet
the objectives that you've so well set out.
That's by way of statement, sir.
I have a question for you, because there's a bit more learning hopefully we
can get from you. I have two questions.
One, are you able to provide examples to this committee of where the approach
you have described today has been implemented? If so, has it been successful?
The second question is a little more specific. With regard to the Northern
Gateway project, which was rejected last week, many have suggested could have
been a model for effective Aboriginal engagement. I understand there were 31
Aboriginal groups involved in an Aboriginal partnership that were economic
stakeholders in the pipeline. Is there a model there that we should be
considering as we do the autopsy?
Mr. St. Germain: As far as examples, Senator Black, I haven't got any
that deal with government guarantees with First Nations. But I could defer to my
partner and colleague Harold Calla from the Squamish First Nation, who is with
us here today. I do know that the government guaranteed the Muskrat Falls
project, and they guaranteed it to the tune of $6 billion.
I don't know if you're aware that Genworth, a corporation that guarantees
mortgages, and the government guarantees 90 per cent of their insurance. That's
an example of where the government has put up a guarantee. I don't think General
Electric needs it as bad as some of our First Nations do.
Having said that, those are a couple of examples of where government loan
guarantees have gone into effect. Most likely it's not as simplistic as I've
described it regarding Genworth and the mortgage guarantee, but it shows that
the government can do this.
I want to bring this up, seeing that you've brought this up, Senator Black.
If anybody has a better idea — anybody, anywhere in the world — don't keep it a
secret, because I will help in any way. I don't even want to be mentioned. As a
personal example, I lived in a community, Senator Black, where there was
nothing; there was no hope. There was no chance of ever going into business. You
either worked as a labourer or a trapper, like my dad was. Even my dad said to
me, "Gerry, you can't be a trapper, because they're destroying the
environment.'' And they did. The muskrat swamps were drained for farm purposes
If you haven't got the capital or access to it, what can you start? In 99 per
cent of the cases, you can't start anything, and that's why I think it is so
Senator Wallin: Good to see you, senator. This is a chicken-and-egg
question for the chicken farmer.
Mr. St. Germain: Have you got a turnip wagon that I can fall off of?
Senator Wallin: You have suggested, as many others have, that the
Indian Act doesn't work and the programs don't work. We have endless evidence of
this, but billions of dollars are spent. So if you and we have access to that
money to encourage investment, equity partnership or to fund other levels of
activities, including even the study itself, there probably is money in the
system to do it, but how do we access it? Does everybody start giving up those
things so that money can be turned over?
I know this is a tough question, but it's not that the money isn't being
spent. So how do we make that effort to harness it and put it somewhere else?
Because then you have to get First Nation groups across the country to say,
"Okay, we forfeit, if it will come back to us the other way.''
Mr. St. Germain: First, it's through education. In my conversations
with First Nations leadership, they recognize this. Right now, education funds
go into the band pool. We put out a study when I was chair of the Senate
standing committee that said that funding for education should be statutory.
That means it goes only for education; it goes to nothing else. If you haven't
got that provision in there . . . .
The other thing with education right at the present time with First Nations
is that there's no standard. There are no school boards. There's no litmus test.
I'll give you an example. The Dogrib in the Northwest Territories just outside
of Yellowknife. They have a school at Rae-Edzo, close to Yellowknife. They have
a very good graduation rate from that high school.
They have another community that's isolated. You can only fly in or go in on
the ice in the winter. The failure rate is just horrific. Nobody really
graduates. The other thing is that good teachers won't go there, but they will
go to Rae-Edzo.
There are so many factors. There's the quality of teachers. There's the
educational structure as a whole. You just can't throw money at something. If
you've got a bucket of money in the house and everybody just grabs a handful and
goes out, the next thing you know the pot is empty. It's got to be targeted.
That's why, with a steering committee like we've got, it's drawing out the
quality people, like Angel Ransom who was here. They are the ones. We've got to
take a chance.
When I was an air force pilot, I had an instructor. My first solo in a
Chipmunk, I crashed — ripped the wings off. An instructor jumped in with me —
one of the standard guys who tested us — and said, "I'm taking you up again.'' I
said, "What do you want to do, crash another one?'' We went up again. He said,
"I know what's wrong. Your instructor didn't let you fly the airplane. You can
go through the motions, but if you don't know how to fly the plane and your
instructor doesn't let you fly it and take the risk, you crash.'' That's the
best analogy I can give you.
Senator Wallin: This is just a secondary point, because I know it's
different in B.C. than in other provinces. The duty to consult means different
things in different places. Do you see that as a veto?
Mr. St. Germain: No.
Senator Smith: It's great to see you, Gerry.
I have one question, and it's a simple one. How? Because when we had Mr.
Calla with us, and the people in the group were very articulate and impressive,
but when you're selling stuff, the first step of the selling process is how to
relate to people and create trust. You've talked a lot about that.
I think what we would possibly need, and I need your input, is where do we
start? Do we start with a project? Do we start in B.C.? How do we start and how
do we build a relationship?
We need to know how they see it, for example Mr. Calla's group. If we truly
believe we're going to empower First Nations people, we need to see what they
think. They have to be confident enough to produce to us exactly what they think
so that we can start the relationship.
When I worked with Ogilvie Mills, we went to Japan and it took us eight years
to sell there because they didn't trust us. Once the Japanese trusted us, we
blew the Americans away at a higher price. So the issue is how do we do it? How
do we get the ball rolling? Where do we start? There are 640 nations, and that's
the latest from Indigenous and Northern Affairs.
Mr. St. Germain: How do we start? I honestly believe that we are
looking for a project now. We're going to try to start it as much as we can with
the people we're working with in British Columbia. British Columbia is a hive of
activity because of the natural resources in the northeast and in Alberta,
adjoining Alberta, and it's got to be moved to market. It will be critical that
First Nations are part of how it's moved there.
That's why I took an interest in northern B.C. I've always said, when I was
dealing with First Nations as the chair of the Senate standing committee, we
have to make certain that they are working together and that they're not working
against each other.
I think what you saw here is the nucleus of the first step. We will find a
project; I'm confident.
But you have to understand, senator — you don't have to understand, but it
would be nice if you did, and you most likely will — that it took us four years
Harold is part of the Squamish First Nation. He's an accountant by
profession. His son studied at the London School of Economics. These two
gentlemen that are in the gallery here, I've worked with them, and we have
really had a tough time.
My former assistant that worked with me here is also working with us. I
happen to be a volunteer, and I go in and I do certain things. But this trust
thing, believe me, is not simple.
We had one meeting up North and the people wouldn't talk. I made a short
dissertation on volunteering and all of that. They brought me to their table and
they said, "You're volunteering?'' It was like there was something wrong with
me. I said, "Yes.'' And they said, "Why?'' And I said, "It's because my dad was
one of you. It's honouring my dad, my father.''
Senator Smith: It took us eight years to get the Japanese to buy our
Mr. St. Germain: So you know.
Senator Smith: We had times where we just sat and looked at each
other. You evolve from that particular point.
Mr. St. Germain: We're working on a project.
Senator Smith: We need the "how.'' I would like to see from Harold a
two-pager that shows how we'd like to progress. It could be tied into the
corridor concept. The corridor concept, of course, is right away where you're
going to get land, you're going to make sure you do all your geopolitics and
your topographical maps, et cetera. But we need to know from the First Nations
folks how they see it so that we can start it. And then, if we have the
initiative, maybe we can find private partners and get a group together.
Everyone says, "Let the First Nations people tell you.'' Well, tell us.
Mr. St. Germain: Mr. Chairman, do you mind if I bring Harold to the
The Chair: We don't mind at all. Harold?
Mr. St. Germain: Go ahead. They want a two-pager.
Harold Calla, Executive Chair, First Nations Financial Management Board,
as an individual: We can give you a two-pager, but there are a couple of
questions. You asked some very relevant questions.
Senator Wallin, we're not looking for government money. We want private
sector money. We want a federal government guarantee loan for that. This is not
going to be a burden if you go down this path.
There will be a need for some money to invest in capacity development. We are
getting a lot of cooperation on that now. The important thing to remember is
this approach is not a multi-billion dollar burden. We want to go to the private
sector, the same place everybody else goes. We just need support to get there,
the way Gerry got the support to buy his first house.
I want to talk about the wood fibre project because you've asked a really
relevant question: How do you get there? Where do you start? I respectfully
suggest there are two places to start. First Nations engagement in the
environmental assessment process needs to be recognized, not as a policy matter,
but as a legislative matter.
I told you before that the Squamish Nation undertook its own environmental
processes and issued its own certificate. The matters that were important, as
Gerry referred to earlier, about the environment being the number one priority
in our communities were addressed in the agreement we had with the proponent.
Squamish gained the right to determine which cooling system would be used in the
LNG plant. We said, "You're not using Howe Sound because it's just recovered
from the copper mine. You're going to use air. You're also not going to use LNG
and put more hydrocarbons in the air. You're going to use electricity. You're
going to move the pipeline. You're going to move the pumping station to deal
with some issues.''
There are significant things that have to happen. I think the project is not
insignificant but it's not huge. The economic, benefit-sharing agreement was
reached. We got to that place. And, in the future, significant opportunities
will flow to Squamish from those opportunities.
You don't have that opportunity in a $40 billion project. If you want to
start somewhere, start with the federal government saying that for the right
projects a loan guarantee is on the table.
Five years ago I went around the country with the Public Policy Forum to talk
to industry and others about First Nation participation in major projects.
Industry said if they were going to put equity on the table in any significant
manner, it's got to be bought, not given.
So that's where we start, senator, to say, yes, there's going to be an
approach towards environmental assessment that recognizes the legitimacy of
First Nations as governments making decisions.
I will tell you that the Squamish process has resulted in a final investment
decision by the proponent to actually build the plant and bring the natural gas
there to ship overseas.
Senator Smith: Is that the LNG?
Mr. Calla: It's the only project that has gotten a final investment
decision. It was done through the cooperation of the First Nation and the
proponent and the province and the federal government for a period of time to
stand down and let us do our environmental assessment process.
Senator Massicotte: Gerry, it is nice to see you again. In your
presentation, you started off by saying the attitude is good but things are not
going on the right track. You specifically referred to the approval of certain
pipelines, but you also referred to the refusal of Northern Gateway. You seemed
to suggest that that was a major negative for the First Nation, the refusal of
that project. Is my understanding of that correct?
Mr. St. Germain: No, it isn't a major negative to them, but I think it
was a political decision that was made. I've been there; I've sat at the cabinet
table trying to make these decisions. Hopefully you're making the right one.
There's no question that it would be nice to be able to move product from
Alberta and Saskatchewan out to the coastal waters.
Senator Massicotte: You're talking as a good Canadian now, but you
said that the rejection of the Northern Gateway shows that our current policy
approach to major project development is not serving the interests of First
Nations. Why is the rejection of Northern Gateway not serving the interests of
Mr. St. Germain: Well simply because it reduces another opportunity
that, I think, in some ways, they could capitalize on.
Senator Massicotte: But the First Nations really didn't support the
Mr. St. Germain: Well, there are some that do and some that don't.
That's a real political hot potato, Senator Massicotte, and we could go on for
quite a while as to who is there.
I know that one of the larger bands in the northeast is really in favour of
having it go through. To them it's a negative because they want it to go
through. I'm not going to mention their names here because I don't want to get
into the politics.
Senator Massicotte: That is a complication. There are some other
groups. Some countries are that way, where there's no one spokesperson that can
make it happen and represent. But that's not the case. The reality is that I
think in this case you have 14 bands; 10 are saying yes and 4 are saying no.
It's complicated, but I guess there's no solution to that.
Mr. St. Germain: Well, no, but eventual amalgamation, education — if
the industry comes up with a bulletproof — 100-year pipelines can be put in the
ground. It's just a matter of cost and profit, but if they were forced to the
Listen, we can put men on the moon and things on Mars. I'm sure that they can
build a pipe that will last for 100 years. By that time, we will mostly be out
of the fossil fuel business anyway or maybe right out of business, who knows.
Senator Tannas: Senator, good to see you again, as always.
Mr. St. Germain: Nice to see you.
Mr. St. Germain: I want to pick up on what Senator Ringuette was
talking about. I think we are coming towards what our recommendation is likely
to be, and it's to recommend the ask we got initially from Jack Mintz and the
School of Public Policy to do a significant study. We have an interesting idea
and not much more than that right now, and we have a book that's 50 years old
from a general who is still alive who kind of got this going.
So a study of some significance needs to happen to even get to the next
level. But equity in this study, who will do it and what perspectives are they
going to touch on?
When we had Harold here before —
Mr. St. Germain: He's still here.
Senator Tannas: No, but when he had the microphone all to himself.
Mr. St. Germain: Well he can have it all to himself.
Senator Tannas: He talked about how First Nations and groups like the
major projects initiative and, potentially, the First Nations Financial
Management Board, et cetera, could play a role in this initial study. I'm very
much aware of that and I think others are as well.
My question is who else should be involved? If we're going to make a
recommendation that talks about the University of Calgary and the School of
Public Policy, who have been the initiators of all of this, frankly, the major
projects coalition, I would assume we would want to have some industry group
from all of the various potential users of a corridor, and then we have to
figure out who will fund it or what recommendation. Do you have any thoughts
around that? If you wouldn't mind letting Harold chip in too, that would be
Mr. St. Germain: I'll defer to Harold.
Senator Smith, you were talking; I'm a salesman.
Senator Smith: Me, too.
Mr. St. Germain: I've always surrounded myself with people smarter
than me, and in most cases that's easy. So I have a guy smarter than me with me
I'm happy that you're here, Harold, so if you want to take a run at Senator
Tannas's question, please do.
Mr. Calla: Thank you, I think.
I think we need to have organizations like the BC First Nations Energy &
Mining Council. We can't ignore the political wings. We need technicians.
We're talking about doing a study, but how are the terms of reference going
to be developed? How do you get the participation of First Nations in a study?
Part of the reason we talk about some of the more fundamental issues on major
project development is because there is a history of resource development taking
place within our traditional territories and no benefit coming to First Nations.
I always remember the late George Watts, from Nuu-chah-nulth, saying — and I
said it here before — "I just want some of the trees that go by my front door,
Harold.'' Well, if you want an approach to be considered by First Nations across
this country, they have to know what is in it for them. They have to know there
is potentially something in it for them at the end of the day. Some of these
more fundamental questions are going to have to be considered, because we do not
want to have the situation occur again where, "Okay, here, Indians; here's the
study. We've done the work; here it is. What do you think? How's that?''
Senator Smith: That's why I asked you for the two-pager, Harold.
The Chair: Senator Tannas, could I go to Senator Day now? I just want
to clean this up.
Senator Tannas: Sure.
Mr. St. Germain: Don't we have to get out of here?
The Chair: You could ask Mr. Rae; he might be able to answer some of
Senator Day: I will just follow along, if I may, from the discussion
that Senator Tannas was leading you to. Our study is not on First Nations
generally, but is there — and I think there is, but we'd like you to say yes — a
role for First Nation communities across Canada in relation to this study of a
corridor across Canada?
Are you aware of any comparative that looked at Aboriginal peoples in other
countries that were involved in a similar situation? We hear of Australia and
New Zealand being very progressive in dealing with their different communities.
We did hear from one witness talking about Western Australia, north to south,
down to Perth, and the role of the Aboriginal people in relation to that
This is not something where we put a bulldozer in and build all at one time,
but it's a concept that if there is need or if there is development somewhere in
the vicinity of this corridor or in it, the rights-of-way, the environmental
impact, a lot of that will have been done. Isn't that where there is a role to
play right now with respect to the First Nations in terms of rights-of-way?
Because that's worth something. If you're giving up a right-of-way and you're
promised that, if there's a development, it can happen here, then that's worth
getting compensated for and getting a partnership in relation to whoever is
doing the development.
Mr. St. Germain: No question as far as I'm concerned. Most of the area
that you are going to go through will be traditional lands.
Senator Day: Exactly.
Mr. St. Germain: So they have to be partners.
We live off of our natural resources, as Canadians, to a vast degree, and
that is the only conceivable way that I can see that First Nations can truly
share in it.
Senator Day, they have to be part of it. If it's organized with them right
from the beginning, then it has a chance, but they have to be there at day one.
Senator Moore raised something with me: Why aren't more First Nations on
boards? I went to a mining conference in Niagara Falls. We were talking, and I
asked the industry people who were there, "How many First Nations people have
you got on your advisory board?'' Nobody lifted their hands. Then I asked,
"Board of directors?'' Nobody lifted their hands. I said, "You have none on
them? Yet they are all here. You want to go on their lands and you haven't got
enough respect to even put some of them on your board of directors? Some of them
are a heck of a lot smarter than most of us, and you.'' That answers your
question, Senator Moore.
Thank you, Mr. Chairman. Sorry to prolong the process.
The Chair: For the Banking Committee and for me in particular, this
whole question of the corridor has been really interesting. As far as I'm
concerned, the First Nations should always be on the agenda of the Banking,
Trade and Commerce Committee because that's who we will have to be doing
business with in the future. Thank you very much for your presentation
And thank you very much, Mr. Calla, for bailing out Mr. St. Germain. It's
very much appreciated.
It gives me great pleasure now to welcome the Honourable Bob Rae, P.C., O.C.,
Q.C., appearing as an individual. Mr. Rae is currently a senior partner at
Olthuis Kleer Townshend LLP. He is working with the First Nations across Canada
as legal counsel, adviser, negotiator and arbitrator.
Mr. Rae was elected 11 times to the House of Commons and to the Ontario
legislature between 1978 and 2013. He served as Ontario's twenty-first premier
from 1990 to 1995, and as interim federal leader and foreign affairs critic for
the Liberal Party of Canada from 2011-13.
Mr. Rae graduated as a Rhodes Scholar from Oxford University in 1971 and the
University of Toronto law school in 1979. He was named Queen's Counsel in 1984
and was appointed to the Privy Council of Canada in 1998, named as Officer of
the Order of Canada in 2000, Companion of the Order of Canada in 2016, and
received the Order of Ontario in 2004.
Mr. Rae, thank you for being with us today. Please proceed with your opening
remarks and then we'll get to a nice question and answer session. We've got
about an hour.
Hon. Bob Rae, P.C., O.C., Q.C., as an individual: Thank you very much,
senator and senators. It's very good to be with you. I appreciate the invitation
and the chance to share some thoughts.
I had the advantage of listening to much of the testimony of former Senator
St. Germain as well as Harold Calla, with whom I have worked on a number of
Perhaps I can keep my remarks fairly short — I'm sure this will come as a
relief to all of you — and have a good time for a dialogue, because I think many
of the questions Mr. St. Germain raised are really important and his perspective
is extremely important.
I just want to make a couple of basic points. First, I think we have to have
some really quite deep historical appreciation of the fact that much of the
development of the country that has taken place has not been to the benefit of
the First Nations people of the country. We need to understand that if we look
at the great resource developments that have taken place over the last 150
years, in most cases the First Nations have been on the margins of all that
We now have both the opportunity and, I would argue, the obligation, and in
part the legal obligation, to ensure that the next round of major development
doesn't happen without the full participation of the indigenous people of the
country. That is the challenge ahead of us as a country.
Obviously I have clients, but I'm not here to represent any of them. I did
actually have the opportunity to serve for two and a half years as the chairman
of the organization known as the First Nations Limited Partnership in British
Columbia to which Mr. St. Germain referred. There we brought together 16 First
Nations to sign essentially a partnership agreement between the member First
Nations and two companies, Chevron and Apache, for a natural gas pipeline that
would go from northeastern British Columbia and northwestern Alberta — basically
along the corridor, along Highway 16, to Kitimat. That project has received
environmental approval from the Government of British Columbia. It is, in a
sense, ready to go, but there has been no final investment decision from the
companies involved, for a lot of reasons — essentially reasons having to do with
market conditions and with the impact of the fall in the price of oil and
natural gas. So I could talk, if I was asked a question on it, about that
The other thing I want to say is that we need to understand that as a result
of the Supreme Court decision that was made in the early 1970s known as the
Calder decision, there is in government policy a significant difference
between how treaty territories are treated as opposed to non-treaty territories.
The conclusion in the Calder case, without being too professorial, was if
you didn't have title and you didn't have treaty that gave you title, you needed
to know that you were entering into an area of uncertainty and that, therefore,
there needed to be a negotiation. That's what's produced the B.C. land claims
decision and the Haida treaty, because the Haida was the origin of the Calder
case. It's what also produced the James Bay treaty, which is a significant
example that I think the committee needs to look at as to how a mid-Canada
corridor. It is really what the James Bay treaty was all about. It has had a
transformative effect on the people in northern Quebec and how, if I may say so,
the treatment and condition of the people in northern Quebec is significantly
different than the treatment and condition of the people in northern Ontario,
where I continue to do a lot of work.
We need to understand that the federal and provincial Crowns have interpreted
mainly the numbered treaties that go from 1 to 11 across the country, and
include, senator, your province of Saskatchewan, my province of Ontario, right
through Alberta to northeastern British Columbia in Treaty 8. The Crown has
interpreted the treaties as basically giving them title and allowing them to
develop virtually at will. Up until the Supreme Court decisions of the 1980s and
1990s and the first part of the 21st century, the Crown was able to move ahead
without anyone challenging what the Crown and companies were doing.
So we built railways and huge mines in Sudbury and vast forestry projects,
and they all took place because the Crown said, "Sure, you have a licence; go
ahead.'' It's only in the last 25 years that we've begun to see a response from
the First Nations saying, "Wait a minute; we didn't surrender anything.''
There's this strong difference of opinion between the First Nations and the
Crown as to what exactly the meaning of the treaties and the treaty relationship
is. That's still a matter of contention and potential litigation and needs to be
dealt with and understood.
There will be a lot of argument about what exactly the Supreme Court has said
about the duty to consult. What is the legal impact of the United Nations
Declaration on the Rights of Indigenous Peoples?
Rather than looking at this as a purely legal issue, essentially we need to
look at it as a policy and political issue and understand that the implication
is, clearly, that development can't really take place without the participation
and direct engagement — and I think the phrase "partnership'' was used — with
First Nations people.
If you look at what's happening on the ground across the country, it's quite
transformative and enormously encouraging. We're seeing the creation of more
Aboriginal businesses than ever before. We're seeing a higher rate of
participation in higher education than ever before. We're seeing a real
difference in how First Nations people are engaging with the resource sector
across the country. You could go province to province and say that compared to
where we were 25 or 50 years ago, we've actually moved the yardsticks a fair
However, we face a challenge, as I've said. Part of the challenge is of
public policy's own making. Senator St. Germain referred to this: The Indian Act
has had the impact of dividing First Nations between themselves. It's very
difficult to get groups of First Nations communities to work together on
projects because for 150 years they've been told, "No, this is your corner here.
You stick with this corner, and they will stick with that corner.'' The
negotiations between governments and companies and the different communities are
not transparent. It's not something where people know what's been agreed to by
one group as opposed to another group. So through tribal councils and regional
organizations and treaty organizations, we try to create more cooperation and
more commonality. It's a challenge, but it's essential; it's what we have to do.
Increasingly, the First Nations are recognizing that, and people are seeing the
benefits that can come from, if I may use the phrase, a more collective approach
to try to negotiate community benefits for everyone.
We have the problem of the interpretation of the treaty. We have the problem
of the Indian Act. If we wanted to, we could just sit back and say, "Well, let's
just see what happens,'' and incrementally little things will take place. Yet,
there is a frustration out there that in the absence of a stronger approach by
the provinces and the federal government — and we haven't heard enough in this
discussion about the role of the provinces, which is extremely significant,
because, as everyone knows, provinces have jurisdiction over natural resources.
The federal Crown, bluntly put, is not the essential organization at the
table; it's the provincial Crown. In all the significant Supreme Court
decisions, the provincial Crown has been just as much involved in granting
timber licences and doing things that need to be dealt with by the courts.
I guess my comment is that one very useful focus of study would be how to
create the conditions for partnership and who has to be at the table. Basically
it has to be the federal and provincial Crowns, both governments; it has to be
the First Nations, and we have to figure out how to get that representation. Who
represents whom? We have to appreciate that the representation will be varied
and different across the country. It's not an easy tapestry to describe; and
obviously the private sector, because of their interest in development and their
concern about the certainty of investment and how they're going to go forward in
the absence of clarity.
It's fair to say that the situation is complex enough now that it does
require the governments to be more prepared to participate directly in resolving
I'm now involved very directly in a negotiation in the province of Ontario
between the provincial Crown and nine First Nations who surround an area known
as the Ring of Fire, which is an area of what I would call mineral potential.
I'm not a promoter, although some Ministers of Finance, provincially and
federally, have said it's worth $65 billion or $100 billion or whatever it might
be. Right now it's all in the ground, and the means of getting there are
difficult because it's more of a bog than dry ground; so you have to figure out
how to build the transportation infrastructure that will get us there.
We need to understand that of the nine communities, four of them have road
access. Five of them are remote communities. The remote communities face all of
the challenges that remote communities face: challenges with education; the
condition of the people; the residual and powerful impact of the residential
schools disaster; severe issues with prescription drug addiction, which are now
affecting communities like wildfire, and people are dealing with that issue all
the time. And yet there's potential and interest in development and breaking a
pattern of very tough conditions which has been in place for a long time.
The First Nations that I represent are not opposed to development. They are
determined that they will control the investment, that they will have a lot to
say about what happens, and that they will be participating as equal partners
with the province in engaging. We're now currently trying to encourage the
federal government to participate in their role in terms of their underlying
obligations under the treaty and their own legislation in the Indian Act and
elsewhere for the conditions on reserve.
This is a huge challenge. It's just one example. You could look at hydro
development in northern Manitoba, mineral development in northern Saskatchewan,
oil and gas development in northern Alberta. In each case, we need to understand
that we don't have the institutions of governance in place to allow people to
control their own development.
The one thing that's missing in the discussion that I heard earlier with
Senator St. Germain is there has to be some agenda that looks at self-government
and at creating the conditions for self-government in ways that actually will
allow First Nations people to make decisions and to arrive at decisions which
they have a say in controlling.
If you look at the James Bay Agreement, you will see that it wasn't one
agreement; it was three separate negotiations over a 20-year period that have
now led to a greater degree of self-government in James Bay than has ever
Since the Calder case, we've been through a period of extensive
negotiation in Yukon, Northwest Territories, the creation of the territory of
Nunavut, a whole effort that's now being made in Labrador with respect to the
Innu and the Inuit to exercise greater control over their resources. That's a
process that the treaty provinces have been excluded from. In the treaty
provinces, there is no process under way now that provides for self-government;
none. So we have this condition of really stalled, not only economic
development, but political development. I think Mr. St. Germain said it clearly:
If you don't let people drive the plane, you're not going to get the engagement
that you're looking for.
I think this is really where we're seeing, in the debate that's occurring in
the First Nations communities, a frustration that says, "Give us the means to
get into a discussion about self-government, because right now we don't have the
means to do that.'' It's not just an economic question, because it relates to
health care and education and other things. People are saying, "Give us more
control over these things and let us participate more directly in improving our
I think that's where I'll stop, and I'm happy to answer any questions. I
really do appreciate the chance to come to the committee.
The Chair: Because I cut you off, Senator Tannas, you will go first.
Senator Tannas: Thank you very much for your observations. I know
others will have questions about what you've talked about. I'd like to take a
little different tack.
You're a statesman and you've led governments. We have an interesting idea
that we are examining here. We need to make recommendations, either to forget
this or to move to some kind of a feasibility study that still will be very
What would you be looking for if you were the Prime Minister and the Senate
Banking Committee came up with this crazy recommendation for what is an
incredibly grand scheme for a right-of-way for rail, road, electricity,
fibre-optics and pipelines to run from one side of the country to the other?
Could you, number one, tell us what you'd be looking for and give us some advice
there? But also, what do you actually think of the idea? Is it crazy? Is it the
next grand scheme for us? What are your thoughts?
Mr. Rae: First of all, on the idea itself, I don't think it is crazy.
I think it's complicated, however.
The Chair: That's what we're finding out.
Mr. Rae: What you have to look at is: How do we do this in manageable
If I wanted to say it's crazy, I'd say, look, all the provinces have control
over natural resources, hydro, broadband and everything else. They're not at the
table. You've got to get the First Nations involved because their legal
situation and their constitutional position have changed substantially over the
last 50 years in terms of recognition by the courts and the political realities
that that has now created. You don't have any kind of consensus on how this will
be done. You've got a lot of environmental issues and you're going to have a
whole series of people who will be raising those questions.
None of those should deter you, in my view, from saying that we need a more
comprehensive approach to the way in which development will take place in a vast
geography of the country that is still claimed as traditional territory by the
First Nations people of the country, and has a benefit not only to them but the
potential development has a benefit to the whole country. So how are we going to
I think you have to break it out in pieces and say, "Okay, let's look at
it.'' None of it will happen without the provinces. You're not going to develop
northern Ontario without the Province of Ontario. As a former premier, I can
tell you that, and the same thing is true across the rest of the country. The
question then becomes: Can the federal government, using a study like this,
bring people together? How can this be done?
Part of it will be in response to what First Nations will put on the table,
part of it will be in response to what the provinces will bring to the table,
and part of it will be in response to what the private sector will bring to the
table. But you can't do this without creating a much bigger partnership than now
The provinces can't do it on their own. They sometimes think they can, but
they can't. The First Nations need partners in order to be able to develop
stuff, although they do want, in many cases, to develop things. And the private
sector will have a view about what's involved, and I think you've got to do it
with all those partners together.
Senator Massicotte: Honourable Bob Rae, I want to take 10 seconds to
thank you. You've served Canada in many roles and you've done so very well.
You're one of the most highly-appreciated statespeople, and you do it in the
interest of the country, for Canadians.
Mr. Rae: Is this on tape? I just want to make sure of that.
Senator Massicotte: We very much appreciate it. Thank you very much. I
think we all feel the same, no matter which stripe we wear.
There are so many questions I have further to your discussion, but could you
simplify things for me a little bit? When you negotiate something, everything
starts with determining your position of power and your leverage. Describe it to
me in a simple sense. I'm always told that lands that have treaty rights are so
much simpler to manage than what you see in Western Canada, where that doesn't
exist and you have to establish the history and patterns and so on. Tell me how
you see it evolving. What would you like the Aboriginal community to be viewed
as? It's not a community; it's not a municipal or a provincial government. Is it
equal to the federal government? Do they have ownership rights? Could you make
Mr. Rae: The simple answer is that it's not that simple because it's a
contested area of law and practice. But having said that it's contested doesn't
mean that it is not resolvable.
When I speak to First Nations elders, let's say, in northern Ontario and ask
them to describe their understanding of the treaty — Treaty 9 is the one that
was signed — they say the treaty is a document about sharing. Their main
argument for saying that they didn't surrender land is that they don't own the
land. They say, "Nobody owns the land. We're stewards of the land. We're keepers
of the land. And we can't transfer ownership of something we don't actually
The concept of fee simple is not an indigenous concept. The concept of
traditional territory is a territory that you use because your ancestors have
always used it. You fish, you hunt, you trap and you have access to the land. It
belongs to you in that sense. And there are families that say, "That's our
territory and that's your territory over there.'' But it's not a concept that
lends itself to saying, "and therefore we surrendered this land.''
However, the treaty commissioners who came from Ottawa — and in the case of
Treaty 9, from Queen's Park as well — clearly were under instructions to get the
surrender because we needed the right-of-way to put the railway through and had
to start doing logging and mining, so they had to get that surrender. They have
the written document that says "surrendered.''
But the First Nations have a very powerful case to say, "If we surrendered
all that land, what did we get for it?'' You look at it as basic contract law
and say, "Well, you didn't get consideration for what you gave up.'' Nobody
would look at that contract and say, "That's a good deal; you got a great
deal.'' You get to live on a little reserve that's nowhere near the lands that
you think of as your traditional territory. Your ownership is restricted to
that, and you don't even own that. It's owned by the Crown and the Crown has an
honourable obligation to hold it in trust for you. We're going to take your kids
away from you. Here's the deal. So you sort of say, "That can't be the deal.''
My argument has been that we can either spend the next 25 years going up and
down the courts to find an answer.
My other view is that this is fundamentally about the honour of the Crown and
how the Crown establishes its honour when the Supreme Court of Canada has said
very clearly that you can't engage in sharp practice. The honour of the Crown
means you have to behave honourably toward the people with whom you're dealing.
I don't think you can take the old interpretation of the treaty and say it's the
most honourable interpretation we can come to.
We have to recognize that this is a traditional territory in which the First
Nations have a clear interest and in which the Government of Canada and the
Government of Ontario have interests. People who are seeking to develop things
say, "I'd like to develop this.'' You say, "Okay, isn't there something that can
be done here that gets us to a better place?'' I think that's really part of
what's going on across the country: People are engaging in this.
The one thing that Senator St. Germain said that I really agree with strongly
is that the key — and Harold Calla said it as well — is coming back to this
notion of stewardship of the land. The reason the environmental assessment issue
was so important for the First Nations is because they do see themselves as
having a critical role in preserving the quality of the land and the water. That
hasn't been done very well by previous governments, so you've got to ask how we
do that better. How do we do that in a way that will make you feel that you
actually have a role in protecting the development and seeing that the
development is not happening in a way that's an affront to your sense of
I have to say this as well: There will be and there are First Nations groups
and other groups in society — environmental groups and others — that are opposed
to certain developments. They're just going to be opposed to them because they
say there's no way you can do this without causing other difficulties.
There are also a lot of First Nations and others that say, "Provided we can
find the right ways and the right terms for this, we're not necessarily opposed
to the development taking place. Under certain conditions, it can take place.''
Senator Massicotte: You talked about treaty lands. How does that
change relative to non-treaty lands?
Mr. Rae: With the non-treaty lands, the governments take the view that
they now have no choice but to negotiate. Why do we have a James Bay Agreement
in Quebec and a different arrangement in Manitoba? Because the Crown has
interpreted the treaty in a certain way and because the Supreme Court of Canada
basically told the Government of Quebec and the Government of Canada, "You think
title has been transferred in northern Quebec but maybe it hasn't been, so what
are you going to do?''
Senator Massicotte: What are your thoughts on equity?
Mr. Rae: Equity is one form of participation. I don't disagree with
Senator St. Germain that it has some important symbolic and economic advantages
to it. I don't believe it's the only means by which people can participate in
the development of a resource.
I believe it shouldn't be ruled out, if that's something that people want.
But if you're looking at the mining sector, for example, that's a very high-risk
investment. It's very different from a utility pipeline. But if a mining
promoter comes into a community and says, "You can become investors in my
deal,'' keep your hands in your pockets. You have to be careful about these
My view is that First Nations governments are governments. What do
governments need to do their job? They need a steady stream of revenue and they
need an ability to regulate activities within their territory. And, by the way,
they need enough territory that they can actually do something. In order to be
effective, that's what governments need. If governments don't have access to
that, then they're in trouble.
If you're talking about a pipeline, for example, or mining activity, the key
for a government is to be interested in how much revenue is coming in, how
steady is that stream of revenue, what kind of ability is there to control the
activity that's under way and what kind of environmental regulatory capacity
exists? I think that's the thing that a government worries about. Plus, in terms
of First Nations, they say, "How many jobs are we getting? Who is being hired
here? How much work do we get?''
But there are a lot of opportunities, for example, in the construction of
roads. We have issues in the North. We talk about a corridor. Most of the
corridor's not accessible by road. Are we going to build roads, and if we are,
how do we ensure their viability?
With climate change, a lot of things are happening to the land and to the
water. You have to look at yourself and ask, "Can we really build stable roads
in these conditions? If we can't, what else is available? How do we do it?''
All those are questions that need to be thoroughly discussed in looking at
how these things can be developed.
The Chair: I don't know but perhaps it would take companies that want
to do business in a particular area — if I'm a landowner and someone wants to
put an oil well in there because they think they can get oil, I own the land and
I get money for it. I don't have to invest anything. I just give them the right
of way and get money for it. I think that's what the First Nations want; they
want to be treated like another government.
Mr. Rae: Yes.
The Chair: But you'd have to negotiate royalties. So they would either
invest as governments do, or they would just take a piece of the action because
they have certain proprietary rights.
Mr. Rae: To me it's about the strength of the economic partnership.
What Senator St. Germain is saying is that you need to be on the board of a
company before the company will listen to you. My own view is if you're a
government, you don't need to be on the board of a company for the company to
listen to you. They will come and see you; they have to because you have
I come back to this question of self-government all the time and ask if we
have the units of self-government. It's interesting. If you go back to the Royal
Commission on Aboriginal People, the so-called RCAP, which was started by Prime
Minister Mulroney and reported under Prime Minister Chrétien, they put this
question of self-government front and centre in their recommendations. That's
why we also negotiated self-government as a principle of constitutional change
in the Charlottetown agreements in 1992. I was present at the creation of the
agreements and I presided over the funeral at the end of the referendum. It's
not as if this idea hasn't been around for quite a long time.
The challenge with self-government is we don't have the right geography in
terms of how self-government will operate. If you have 640 separate little bands
of 400 and 500 people, it's very difficult to say that is the government that's
going to run the health care system and run the education system. You have to
create bigger units. I'm not always the most popular lawyer when I say this to
people: You have to be part of a bigger unit because that's how you're going to
develop the scale and capacity to be able to actually deliver the services and
be able to create the means of self-government. That's something that we need to
There are some people who say, "Well, because of the Indian Act, we can't get
there. Forget it. We're not going to do that.'' My view is that we can't afford
to ignore the long-term objective of self-government because it's such a
critical part of what it means to be an autonomous person. You really need to
have a capacity to make decisions.
The evidence is very clear that those communities that have more
self-government actually have better conditions. You could look at the United
States examples, for instance. I was interested in the comments that were made
about comparative examples. I can assure you that Australia is not ahead of us;
in many instances we can show we're actually ahead of them. We're a little bit
behind New Zealand in some ways because the number of Maoris is different, the
centrality of the state is different and the treaty relationship between the
Maori and the Government of New Zealand is a very different situation.
But the Navajo are 260,000 people and they control land that is bigger than
the size of Ireland. The Navajo have self-government. They have higher rates of
success in high school. They have higher rates of success in university. They
have greater capacity.
In British Columbia, we can point very clearly to it. Studies have been done
that show that communities that actually have self-government have better
outcomes. They have better results. It seems to me as a federal country where
the provinces are self-governing and the federal government is self-governing
and we're all connecting with each other, we ought to be flexible enough to say,
"Well, let's look at other units of governance and see if we can't strengthen
the governance in First Nations communities and then say we will benefit
ultimately from that.'' You're not going to get a comprehensive corridor
solution without dealing with the governance problem.
Senator Black: To start with, premier, if I may, I want to echo what
my colleague Senator Massicotte has said. The pin that you wear so proudly on
your lapel is a recognition that this country thanks you for the contributions
that you make every day, to this very minute, sitting here today helping us
through this complicated problem, so I would like to indicate my thanks.
Mr. Rae: Thank you very much.
The Chair: He's going to want to come back.
Mr. Rae: Don't worry, there's no risk of a revival.
Senator Black: My question is this: Given all you have said and all we
have heard over the last number of months, if we were to accept the premise that
a northern corridor or a new national corridor is a good thing for Canada, is
the answer to turn to the First Nations community across Canada and say, "It's
yours; you do it''?
Mr. Rae: I don't think it can happen without the First Nations. I
think the practical reality is that this committee could express that thought,
but the provinces would have something to say about it because you're basically
giving away what they think is theirs. I think it's a slightly more complicated
I would simply say this is something that requires greater study, but then it
also requires a sense of, as I said, what are the human footsteps that we can
take that will actually get us to a better place in 20 years than we have been
and we are today?
Senator Black: And I'm trying to explore whether there is a leap.
Mr. Rae: If there's a leap, it has to be a leap that you can actually
accomplish. I think that the provinces need to be engaged in this process
because they have, through their sense of responsibility and their
constitutional powers, a sense that they want to be involved in the resource
question. Your province and the Province of Saskatchewan I suspect would have
something to say about a federal government that said, "Northern Saskatchewan,
you can have that and you can develop it as you wish.'' As somebody who's a
strong supporter of the First Nations, I would say great, thank you, but I don't
think you would be able to implement it easily.
Senator Black: I wouldn't suggest that the underlying assets would be
transferred, but there would need to be some arrangement whereby the control and
direction and control in mind of the initiative would be a national project of
Mr. Rae: Yes, for the federal government to adopt that approach I
think would be a great example of leadership. The challenge will be how to
implement that leadership.
One of the particular challenges we face right now is the connection between
walking and talking, because rhetorically we've gone quite far in terms of the
language of reconciliation, the language of change, the language of
transformation and so on, and that's important. It's important to have that
vision, but it's also important to implement the vision and to say this is how
we're going to implement it. If the first thing that happens is that you have a
bunch of premiers saying, "No, it's too complicated to do that'' — I'm not
singling out the provinces, but I'm just saying you really have to figure out
how to actually get there.
If the federal government were to say, "We don't want an equity share in any
of this and we want the First Nations to be the primary beneficiaries of the
kind of development that's involved,'' I think that would be fine. The question
would be, how are you going to do that? I think that's what requires a study. I
don't think any of us can draw on the wall and say this is how it's going to be
Senator Black: Thank you very much. That is very helpful.
Senator Campbell: I echo everybody else, Bob, in my admiration for
what you have done and accomplished.
Mr. Rae: You'll forgive me if I feel like I'm attending my own funeral
Senator Campbell: It's okay. It's the Senate, all right?
In the 21st century, how valid are the treaties that were done in the 1800s?
Mr. Rae: It's interesting, the treaties. Again, this is just
experientially, my sense is that there's a tension between the sense of
Canadians that we are all treaty people, or most of us are treaty people —
certainly in Ontario we're treaty people — and the First Nations' insistence
that that's the case and that they are treaty people, and how the treaties have
been interpreted by the Crown up until now. That's the tension.
If you say to me, how valid are the treaties, I think the really critical
question is this: Is it conscionable for the Crown to continue to use the
treaties as a way of denying the rights of First Nations to participate in their
own self-government? That's where I have a problem with how the Crown has gone
forward. That's why I think we all struggle to say that the treaties need to be
renewed; we need to breathe life into the treaties; we need to find ways of
expressing the treaty relationship.
One quite astute lawyer said to me once, "The trouble is, the First Nations
interpret the treaties as a marriage relationship, as the creation of a
relationship; and the Crown, so far, governments, have interpreted the treaties
as a divorce settlement.'' They say, "You get this, we get that, good-bye.'' The
First Nations are saying, "Wait a minute, we thought we had a relationship. We
thought it was based on sharing. We thought it was based on greater
understanding.'' I think that's not a bad way of trying to understand the
tension that exists.
My own view is that if it ever were to come to a court case, as I say,
inequity, I think you would have a very hard time saying that the hard-edged
interpretation of the treaty by the Crown in exacting a surrender is the way to
As a matter of policy, the federal government could say, I believe that they
should say, "We don't actually require a surrender of title for us to have a
Senator Campbell: Something that we haven't addressed here, that I can
remember, is the effect of outstanding land claims. I don't know what they are
now. This isn't being critical, but when the GST was dropped by two points, it
was interesting. I was on the Aboriginal Committee. The two points generated
about $6 billion. The land claims treaties, to clear them all was $6 billion. I
remember that clearly. So we're talking about this, but in the middle of this,
over and above the treaties, we have all of these land claims that haven't been
settled all the way across, and lots of them are up in that corridor, I believe.
Mr. Rae: Yes, they are.
Senator Campbell: What do we do about that?
Mr. Rae: That's an issue. The major land claims that involve large
tracts of land and multitudinous billions of dollars are in the non-treaty parts
of the country. Then there is a specific claims process that involves the
adjustment of reserve borders and boundaries and looks more within the treaties
and whether there is a way of dealing with this. The claims process is
Going back to the mid-1970s when the Calder case came down, Mr.
Trudeau Sr. had to do a 180 turn because he had originally been an advocate of
the white paper which essentially said, "We're out of here. The Indian Act is an
abomination. It's an act of paternalism. We have got to get rid of it. We are
prepared to negotiate with the provinces and make sure that everybody remains
whole, but essentially, communities, you are on your own and you are reverting
to the relationship with the province.'' That was rejected powerfully by the
Ultimately, what drove the change in government policy was the Calder
case which said, "Well, we really don't know where the title is right now in a
lot of the contested land.'' So government said, "We're going to have to create
a new process. We're going to have to take a different approach.'' And to give
him credit, Mr. Trudeau said, "Okay, that was then, this is now, and we're going
to have a claims process.''
Then you had the additional reality of the patriation process that I was also
present for when section 35 was brought in. When section 35 was brought in, at
the insistence of the First Nations, I don't think the federal government or the
provinces appreciated what the implications of section 35 would be.
The Chair: Even on self-government and all these other issues, as you
say and as Senator St. Germain said, we have 625-and-some Indian nations in the
country. They don't all get along. Some are very successful, some have economic
success, educational success on their reserve and everything is going great for
them, and then others are living in poverty and can't seem to get a leg up.
In B.C. they have overlapping claims. They are fighting amongst themselves
about who owns what. They can't clear that mess up.
Mr. Rae: No, but we do need a process that does deliberately attempt
to clear that up. We do need to clear it up.
The Chair: Yes.
Senator Campbell: To be fair, in B.C. there are overlapping claims
with three First Nations, but they work together. We have seen that with the
defence lands. They are working together. Because they are overlapping doesn't
necessarily mean there's not a solution. They are working towards that solution,
at least in B.C.
Mr. Rae: Just to continue the conversation — and I like the back and
forth. It takes me back to the brief period in which I so-called ran a caucus,
insofar as one can run a caucus.
The critical thing to remember, senator, is that the term "First Nations''
really doesn't give you a full texture of the indigenous nature of the country.
The Plains Cree are a different people from the Ojibwa of northern Ontario. In
northern Ontario you have the James Bay Cree coming over from Quebec that are on
the coast of Hudson's Bay and James Bay. Then south of that you have Ojibwa Cree
and Ojibwa, and across the country you have different language groups and
cultures from Labrador to the Yukon. You have all kinds of different groups and
different groupings. Culturally, you have profound differences.
You also have differences of economic condition that stem from where people
are. If you are right next to a mining development or — and the evidence is very
clear about this — if your reserve is near a city, your education results will
likely be better and your condition will be better. You will have had 100 to 150
years of people getting jobs, getting work, subcontracting, being involved in
businesses and all kinds of things.
If you are in a remote community in the middle of northern Manitoba or
northern Ontario, people say, "Well, you know, you're not doing very well.'' You
say, "How the hell would anybody do well in those circumstances?'' Economics
requires opportunity and a chance. Of course things aren't great because people
have not been given the ability to get the revenue that would come from any
development and they haven't been allowed to take advantage of that opportunity.
I think you need to see that the glass is either half full or half empty,
depending on your nature. I'm a half-full guy. I think that we have made a lot
of progress. We have a long way to go.
Senator Smith: Sir, the government spends about $10 billion either
directly through Indigenous and Northern Affairs or horizontal relationships
with other departments. One of the recommendations we may probably make is to do
The University of Calgary visited us and showed us the program that they put
together. We're looking at probably $800,000 to $1 million.
Where would you go to get the seed money? To the government or try to get a
combination of provincial money? How do we kick-start to get a pulse in terms of
the actual study? Based on your experience, how do we do that?
Mr. Rae: Let me say that first of all we don't have a lot of
independent sources of information about what I would call the indigenous
condition and the condition of indigenous finances and the condition on reserve.
People talk a lot about the money, but let's also understand that the
Parliamentary Budget Officer reported yesterday that on-reserve funding for
education is several thousand dollars per student short of what would be spent
in a neighbouring — not the South — community next door but one that is governed
by the province.
You then have to look at the condition overall of where provincial transfers
fit in. We're spending money, but what exactly are we getting? Why is it that
conditions are where they are in certain communities and are better in others?
Is there one place that can provide this information? I have actually been
doing quite a lot of work, partly through my teaching at the university, in
trying to figure out why we don't have more information about this, even about
outcomes. We know very little about outcomes compared to other jurisdictions.
It has always astonished me that in government you can spend a ton of money
on running stuff and keeping our hospitals going and everything else. We don't
do a very good job of evaluating the results of spending all this money. How
does it connect to outcomes? And if the outcomes are really bad, that doesn't
necessarily lead to one answer, but then forces you to say, "Why are we facing
this challenge?'' That's another means of inquiry.
I don't think you should have to chase around for the money. The reality is
that it's the obligation of government, if they think it's a worthwhile project,
to say it should be funded. I think there would be a lot of interest in a number
of foundations and others in asking why we wouldn't be trying to get more
information that would actually allow us to reach certain conclusions about
where things are going.
I have to say that the argument that I've heard many times is about how — I
think I heard the phrase used today — we're throwing money at the situation. We
need to understand the nature of the deficit that the First Nations communities
are in. It's not just a financial deficit, although in many cases it is. How
many of the communities are in third-party management? How many are in
co-management? How many are autonomous in terms of their ability to manage their
This was the result of the system. If you were a bank, you would look at this
and say, "What is going on here? Why is this happening?'' I don't see any
systematic study in government. If I was premier again and half of the
municipalities were in co-management, I would say there's something wrong with
the system. It's not their fault. Something is not working in how we're doing
things leading to this result.
We need to be very blunt and direct about figuring out what the failure is
here. This is a dialogue that needs to happen.
The Chair: Thank you very much, Mr. Rae.
Mr. Rae: Thank you. It is a pleasure being back on Parliament Hill.
The Chair: Thank you for your contribution to the country. It's nice
that people like you get involved in the political game. It is very much